Why You Need a Deed In Lieu of Foreclosure Hardship Letter
The Deed in Lieu of Foreclosure Hardship Letter is required by the bank before they’ll consider your request to convey your home back to them and is the one opportunity you get to explain your situation in personal terms. More on Deed in Lieu of Foreclosure
While they’re not looking for your life history, banks want to know they’re not getting ripped off and that you have a legitimate reason for requesting help. Use our Deed In Lieu Cover Letter together with a Deed in Lieu of Foreclosure Hardship Letter similar to the Sample provided below to get things started.
The Financial Hardship Letter can also be used with Short Sales and Loan Modifications and generally covers the reason for your economic hardship and financial details. Most financial problems fall into one of two categories-medical problems or job loss. Although many face foreclosure because adjustable rate mortgages have matured resulting in unaffordable payments, most of these situations are also accompanied by unemployment or medical issues as well.
Remember, banks are not your buddies and don’t want to help you unless it helps them as well. So while its important to honestly explain your financial condition, let them also know why your foreclosure alternative is good for the bank. The strongest incentive for the lender is avoiding the time and expense of Foreclosure Lawsuits, but its also important to remind them that if they don’t accept your Deed in Lieu of Foreclosure you have other Foreclosure Options.
These options include Walking Away and making their ownership and title rights more complicated, Defending Your Own Foreclosure Lawsuit or filing Foreclosure Bankruptcy all of which greatly delays the same end result and significantly increase costs for the bank. 10 Foreclosure Options to Beat the Bank
Because there are so many personal factors involved with each borrower, the Sample Deed in Lieu Hardship Letter below should be used as a guide for what to include in your letter. Personalize your situation by letting the bank know there’s a reason for your problems and that you’re strong and intelligent enough to protect your foreclosure rights and not just roll over and give up.
Remember that with any of the foreclosure options we cover, you can do them all yourself but the chances of success greatly improve when you hire qualified and experienced professionals to help you. If you’re looking for a loan modification, hire someone who can help you get the job done but make sure you don’t pay up front fees and be sure to work with them using the information provided on our website.
With a Deed in Lieu of Foreclosure, a brief meeting with an attorney to discuss your legal rights and obligations can only help you avoid problems and maximize your benefits.
* You will also need the Deed in Lieu of Foreclosure Cover Letter
Sample Deed in Lieu of Foreclosure Hardship Letter
FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____
This Financial Hardship Letter will summarize our current financial situation, explain how we got here and support the request to enter into a deed in lieu of foreclosure with the bank to avoid a foreclosure lawsuit with nothing to gain for either side.
Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and our resulting underwater mortgage.
Because of my recent unemployment [or medical problems], our household income has been significantly reduced. In fact, our income has been reduced from $____/month in 2010 to $_____/month currently with monthly expenses exceeding $_______including the mortgage payment. Although I hope to return to work as soon as possible, there’s nothing imminent and I have no real idea how long it will take. Until that time, we have little or no income and simply can’t continue to make loan payments.
Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.
As a result of our reduced income and uncertainty as to when it will improve combined with the unavailability of equity based credit, we have no option but to convey our property back to you through a deed in lieu of foreclosure. By agreeing to waive any resulting deficiency balance, which is not collectable anyway, you’ll make the transaction feasible for us and avoid the need to simply walk away or declare bankruptcy to reach the same result.
The alternative in light of our dire financial condition is a long and expensive foreclosure lawsuit for the bank with the same inability to collect any deficiency balance. Both a decision to defend the lawsuit or file bankruptcy would greatly delay the process and increase your costs, as would simply walking away without working with you.
As you can see, a deed in lieu of foreclosure is clearly the best option for all involved as the bank gets the same result without cost and delay.
Please let us know if you need any additional financial information and thank you for your time and assistance.